In John
Rocchio Corporation v. Pare Engineering Corporation, 2019 WL 575822 (R.I.
Feb 13, 2019), the Warwick Sewer Authority (“WSA”) contracted with Pare
Engineering Corporation (“Pare”) to provide pre-bid services, including preparing
a Request For Proposal (“RFP”) to be provided to general contractors submitting
bids. Pare completed the RFP and WSA
received bids from five companies. John
Rocchio Corporation (“Rocchio”) submitted the lowest bid and DiGregorio, Inc.
(“DiGregorio”) submitted the second lowest bid.
After the bid, Pare
reviewed the bids and provided recommendations to Janine Burke-Wells, the
executive director of the WSA. Pare
noted that Rocchio omitted certain required EPA forms, which could disqualify
Rocchio. Pare also noted Rocchio had
previously worked for WSA, which could be factored into the final decision. Otherwise, Pare stated it was “not aware of
any reasons why the Contract should not be awarded to either [Rocchio] or
[DiGregorio].”
Burke-Wells then
recommended to the WSA board that Rocchio’s bid be rejected and the contract
awarded to DiGregorio. WSA noted the omitted
EPA forms and a concern that Rocchio’s past work for the WSA resulted in
conflicts over change orders and increased project costs.
Rocchio sued Pare
for negligence, interference with prospective contractual relations, and breach
of contractual obligations owed to Rocchio as a third-party beneficiary of the
contract between the WSA and Pare.
Rocchio argued it was an intended third-party beneficiary of the
contract between WSA and Pare and therefore, Pare owed it a duty to properly prepare
the RFP and fairly evaluate the bids.
Pare moved for summary judgment, arguing the award to DiGregorio was
based on the recommendation of Burke-Wells and the vote of the WSA board, not
its Report. Pare maintained it did not
intentionally interfere with Rocchio’s prospective contractual relations, pointing
out that it had no interest in which company was ultimately awarded the
bid.
Summary judgment
was granted in favor of Pare and the Supreme Court of Rhode Island affirmed. The Court found that Pare did not owe a duty
to Rocchio and in doing so, distinguished the case from a previous ruling in Forte
Brothers, Inc. v. National Amusements, Inc. 525 A.2d 1301 (R.I. 1987). In Forte, the Court held an engineer
could be liable to the general contractor based on the contractor’s reliance on
the engineer’s performance of its contractual duties to the owner. However, in Forte, the alleged
negligence occurred after the all three parties – the owner, the engineer, and
the contractor – were in place. Further,
in Forte, the Court found the engineer and the general contractor had
interrelated contracts with the owner.
The Court also distinguished
Rocchio from Forte, in part, on the basis, the identity of the
general contractors who may submit bids is not foreseeable. The Court ruled, “a determination that Pare
owed a duty to Rocchio under the circumstances present in this case would
effectively be a determination that all engineers contracted by project owners
owe a duty to all general contractors that could possibly submit a bid on any
given request for proposal.” The Court
called this, “an absurd result.”
